Tesla CEO Elon Musk and his security team leave the company’s local office in Washington, D.C., on January 27, 2023.

Jonathan Ernst | Reuters

A San Francisco federal court on Friday found Elon Musk and Tesla not liable in a securities fraud lawsuit related to Musk’s 2018 tweets.

The TeslaThe SpaceX CEO and Twitter are being sued by Tesla shareholders over a series of tweets he wrote in August 2018 that said he had “secured financing” for the privately held carmaker at $420 per share and that “investor support” such transaction was “confirmed”. Tesla’s trading was halted after his tweets, and its stock price remained volatile for weeks.

The jury deliberated for less than two hours before the verdict was read. Attorneys for the plaintiffs told CNBC that they are “disappointed with the verdict and are considering next steps.”

“He doesn’t think ahead in this dismounted moment that this could be interpreted differently and what that means for him,” Musk’s lawyer told jurors earlier Friday. “At that moment he didn’t think, ‘how can you interpret my words differently than what they mean to me.’

“You have to appreciate it in context — he’s looking at making it private, and the question is whether he’s actually going to pursue it,” Musk’s lawyer said. “No fraud was ever based on consideration.”

Musk’s lead attorney did not immediately respond to requests for comment.

Shareholders in the certified class action include stock and option buyers who claim Musk’s tweets were reckless and false, and that relying on his statements to decide when to buy or sell cost them a lot of money.

Musk later said he had a verbal commitment from Saudi Arabia’s sovereign wealth fund and thought he would get the financing at his proposed price on a handshake basis. However, the deal never happened.

During that lawsuit, Musk also said he would have sold shares in SpaceX to finance a private deal for Tesla, and also took funds from the Saudi sovereign wealth fund.

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